Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Rabobank NZ annual profit falls 14%

Tuesday 28 March 2017 05:42 PM

Rabobank NZ annual profit falls 14% on higher provisioning for bad dairy debt

By Paul McBeth

March 28 (BusinessDesk) - Rabobank New Zealand posted a 14 percent decline in annual profit last year as the rural lending specialist boosted its provisioning for bad debts in the face of the dairy slowdown.

Net profit fell to $89.5 million in calendar 2016 from $104 million a year earlier, the Wellington-based lender said in a statement. The decline in profit was largely due to the bank booking $15.1 million in impairment charges on bad debt. In 2015 Rabobank booked a $5.6 million gain, writing back the value on impairments. Net interest income edged up 2.6 percent to $251.3 million, outpacing a 2.2 percent increase in the size of Rabobank's NZ net loan book to $9.65 billion.

"Given the challenging dairy industry conditions experienced in recent seasons, it was prudent to increase provisions to $15.1 million in 2016," chief executive Darryl Johnson said. "We are comfortable with this level of growth which illustrates our consistent approach to supporting operators in the food and agribusiness sector, whilst at the same time maintaining high credit standards."

Dairy prices started recovering through the second half of 2016 after an earlier slump stretched the farmers' balance sheets as they faced yet another season of operating at a loss. As global supply tapered off and Chinese demand picked up, those forces turned around and milk processors are currently forecasting the farmgate payout to be in the black for farmers this season.

Rabobank's Johnson today said the outlook for most of New Zealand's key agricultural sectors was positive for this year and he expected business growth to continue through 2017.

New Zealand lenders have been struggling to attract depositors over the past year as record low interest rates reduce the appeal of term deposits, meaning banks have been forced to tap more expensive wholesale funding lines overseas. However, Rabobank increased deposits 8.5 percent to $4.14 billion through 2016.

The bank's total capital ratio stayed well above the 8 percent regulated minimum at 13.57 percent, though were down from 13.72 percent a year earlier.

Rabobank New Zealand didn't pay a dividend to its parent, instead retaining earnings. However, management fees to related parties rose 11 percent to $52.2 million.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Energy Resources Aotearoa: Doubling Of Coal Use Shows Need For Local Natural Gas

New figures showing a near doubling of coal-fired electricity generation highlight New Zealand’s energy shortage and the need for natural gas as a lower carbon alternative, according to Energy Resources Aotearoa... More>>


E Tu: ‘Sense Of Mourning’ As Norske Skog Mill Set To Close

Workers at Norske Skog’s Tasman Mill now know they’ll be losing their jobs in little over a month’s time.
On Wednesday afternoon, workers were told the mill will be stopping production from the end of June... More>>




Stats NZ: Card Spending Sees Strong Growth In May

Seasonally adjusted card spending rose by $189 million (2.3 percent) between April 2021 and May 2021, Stats NZ said today.
Spending rose across all industries for the first time since New Zealand moved to level 1 in June 2020... More>>




Auction: 1.4 Million In Rare Vintage Watches, Gems, Jewels & Diamonds Go Under The Hammer At Webb’s

An auction event showcasing over 1.4 Million dollars in rare jewels, gems, diamonds and vintage watches is due to take place this Sunday by Auckland based auction house Webb’s... More>>

Catalist: NZ’s New SME Stock Exchange, Gets Licence To Go Public

New Zealand has a new stock exchange – designed specifically for small and medium-sized businesses (SMEs) to raise up to $20 million a year from the public.
Called Catalist, the exchange has already been successfully working the private investment sector.... More>>

E-Commerce: Over 40% Of Those Engaged In The Bitcoin Community Are Millennials

Bitcoin has emerged to be a popular topic among millennials with digital currency increasingly being viewed as a potential source of creating wealth through investments. The interest in bitcoin by millennials signals the role this age group plays in the possible realization of the digital currency’s mass adoption... More>>